MrOBKandle, Has a Utility Function C₁c₂, Where C₁ Is

question 16

Multiple Choice

Mr.O.B.Kandle, has a utility function c₁c₂, where c₁ is his consumption in period 1 and c₂ is his consumption in period 2.He has no income in period 2.If he had an income of $60,000 in period 1 and the interest rate increased from 10 to 17%,

• A)his savings would increase by 7% and his consumption in period 2 would also increase.
• B)his savings would not change but his consumption in period 2 would increase by 2,100.
• C)his consumption in both periods would increase.
• D)his consumption in both periods would decrease.
• E)his consumption in period 1 would decrease by 17% and his consumption in period 2 would also decrease.

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Definitions:

Economic Order Quantity

A formula used in supply chain management to determine the optimal order size that minimizes the sum of ordering and holding costs.

Improve Productivity

The process of enhancing the efficiency and effectiveness of operations, typically by optimizing resources and workflow to produce more output with less input.

Long-linked Technology

Refers to the sequential process technology where the production process consists of a series of steps, each of which must be completed before the next can begin.

Interdependent Tasks

Tasks in which the output, performance, or results of one task depend on the input or performance of another.